London Bridge 2 PCC Limited (Titania Re 2026-1)

Ariel Re is back in the catastrophe bond market looking to sponsor its sixth issuance under a Titania Re name.

However, for the first time Ariel Re will not be using its Bermuda based special purpose insurer Titania Re Ltd. for this new catastrophe bond, instead opting to use the Lloyd’s of London insurance-linked securities (ILS) structure London Bridge 2 PCC Limited for this issuance, sources have said.

So, in this case the Lloyd’s insurance-linked securities (ILS) structure London Bridge 2 PCC Limited will issue the notes and connect the capital from investors to Ariel Re’s business via retro reinsurance agreements.

London Bridge 2 PCC Limited is offering investors two tranches of Series 2026-1 notes, via two protected cells named Titania Re 2026-1 Class A and Titania Re 2026-1 Class B, sources told us.

The Titania Re Series 2026-1 notes will be sold to cat bond investors and the proceeds used to collateralize reinsurance agreements between the protected cells of London Bridge 2 PCC and Ariel Re’s Syndicate 1910, affording the reinsurer a source of multi-year US focused property catastrophe retrocession.

We understand this Titania Re 2026-1 issuance from London Bridge 2 PCC will ultimately provide Ariel Re’s Syndicate 1910 with a roughly three year source of fully-collateralized retrocession covering losses from US named storms, earthquakes and wildfire events.

Notably, this is now the second Titania Re cat bond in a row to include the wildfire peril, after it was first introduced to Ariel Re’s cat bonds in the 2025 issuance.

The $125 million of Titania Re 2026-1 notes being offered across the two tranches will provide Ariel Re’s Syndicate 1910 with retro protection on an industry-loss index trigger and annual aggregate basis, we understand.

The protection will run across three annual risk periods until April 2029, while we’re told there will be a franchise deductible of $125 million for each named storm or earthquake event, and $240 million for each wildfire loss.

A $75 million tranche of Titania Re 2026-1 Class A notes will have an initial attachment point at $2 billion of losses, with exhaustion set at $2.4 billion, giving them an initial attachment probability of 3.64%, an initial base expected loss of 3.08% and they are being offered to cat bond investors with price guidance in a range from 6.75% to 7.5%, sources have told us.

A $50 million tranche of Titania Re 2026-1 Class B notes are riskier, having an initial attachment point at $1.2 billion of losses, with exhaustion set at $1.6 billion, giving them an initial attachment probability of 8.41%, an initial base expected loss of 6.7% and they are being offered to cat bond investors with price guidance in a range from 14.5% to 15.5%, it is said.

Update 1:

We understand that Ariel Re has now secured its targeted $125 million of multi-peril retrocession from this its first catastrophe bond to be sponsored under the London Bridge 2 PCC structure.

The Titania Re 2026-1 Class A notes were priced at the target $75 million, with an initial risk interest spread of 7.5% to be paid, so at the upper-end of guidance.

The riskier Titania Re 2026-1 Class B notes were priced at the target $50 million, with an initial risk interest spread of 15% to be paid, so at the mid-point of guidance.